Brussels, 07/03/2016 (Agence Europe) - On Monday 7 March, the Finance Ministers of the eurozone made a considerable gesture towards Greece, which is obliged to comply with the strict conditions of the third financial bailout plan while simultaneously dealing with a humanitarian crisis which is unprecedented in Europe, due to the massive influx of refugees from Turkey (see other article).
In addition to the green light it gave to the immediate return to Athens of the heads of mission of the institutional creditors of Greece, the Eurogroup paved the way for the discussions on the controversial issue of reducing the Greek public debt to take place sooner than anticipated. Discussions on the Greek public debt are “part of the solution” to the efforts the Greek government needs to make in order to comply with its budgetary commitments, the President of the Eurogroup, Jeroen Dijsselbloem, said “this debate will come round fairly quickly”, he added. However, he did not explicitly state that the talks on the debt and those on the budgetary and reform efforts required were now parts of the same package to conclude the first monitoring mission of the third bailout plan.
The Eurogroup President remained tight-lipped on the reasons for the reintroduction of the question of the debt into the talks between Athens and its creditors. The Commission of the Economic and Financial Affairs, Pierre Moscovici, referred to the “pressure” of the migratory crisis which Greece is facing. At the European Parliament last week, the Greek minister Euclid Tsakalotos stressed that it was impossible to deal with the migration situation in isolation from the discussions on the third Greek bailout plan (see EUROPE 11403). “We are impatient to carry out these talks, to conclude the monitoring mission in a timely manner and to start to talk about the debt”, he said after the Eurogroup meeting.
According to Dijsselbloem, there is still a gap between the budgetary efforts which remain to be made ('fiscal gap') to comply with the trajectory leading to a primary budgetary surplus (not including servicing the debt) of 3.5% of GDP by 2018, in line with the objective laid down in summer 2015. Additionally, the reforms to be carried out must be “in depth”, he added.
Moscovici listed the key elements of the negotiations: the creation of a privatisation fund, reforms on the taxation of income and pensions, the creation of an independent income collection agency and the treatment of non-performing bank loans.
Of the €86 billion from the European Stability Mechanism (ESM) earmarked for the third Greek bailout plan, an envelope of €21.4 billion has been made available (€16 billion for budgetary support and €5.4 billion for bank recapitalisation). According to the head of the ESM, Klaus Regling, Greece has no urgent need for cash in order to honour its commitments, ahead of a repayment peak to the ECB in July. Like the others, he expressed his hopes of a rapid positive outcome of the monitoring mission so that further tranches of aid can be made available and arrears avoided. (Original version in French by Mathieu Bion and Elodie Lamer)